On the occasion of launching a new financial instrument called “ESIF Energy Efficiency Loans for Entrepreneurs”, a ceremony was held when the Finance Agreement was signed between the Ministry of Regional Development and EU Funds and the Croatian Bank for Reconstruction and Development. Pursuant to the Agreement, EUR 68 million, i.e. HRK 511 million, will be available to micro, small, medium and large private entrepreneurs with registered activities in the manufacturing industry and service sectors (tourism and trade).
Favourable terms and conditions
Financial instruments are co-financed under the European Structural and Investment Funds and generally take the form of credit lines, guarantee schemes and entrepreneurial capital funds. Under the instrument “ESIF Energy Efficiency Loans for Entrepreneurs”, loans ranging from EUR 25,000.00 to EUR 10,000,000.00 will be offered to entrepreneurs at favourable terms and conditions. The interest rate will be set in accordance with the index of development of a local government unit on whose territory a project is implemented. The repayment period will be up to 17 years, 4-year grace period included. Besides favourable pricing, the added value of these loans lies in the non-charging of any fees, as a result of which these loans are affordable sources of finance that enable energy savings and competitiveness improvements by reducing input costs.
This financial instrument will be implemented through commercial banks as financial intermediaries to be selected by HBOR through a public tender procedure and will provide HRK 245 million of private capital.
The signing ceremony was attended by Ms Gabrijela Žalac, Minister of Regional Development and EU Funds, Mr Domagoj Validžić, Assistant Minister of Environment and Energy in charge of energy issues, and Ms Tamara Perko, President of the Management Board of the Croatian Bank for Reconstruction and Development.
New and simpler approach to the EU funds
“Financial instruments, as a new and simpler approach to the EU funds, primarily due to lower administrative requirements, have another significant characteristic, i.e. they are reused when paid back to the state budget. In other words, after having been paid back, the Republic of Croatia will use them for the same purposes, which means that the funds we invest in financial instruments are used several times, i.e. tentatively speaking recycled, which is important from the point of view of taxpayers”, said minister Žalac.
ELENA project worth more than EUR 2 million
The financial instrument “ESIF Energy Efficiency Loans for Entrepreneurs” is the third financial instrument within the framework of the Specific objective 4 “Supporting the transition to the economy with low CO2 emission levels in all sectors”, beside the financial instruments “ESIF Loans for Energy Efficiency for Public Buildings” and “ESIF Loans for Public Lighting” also placed by HBOR, and are intended for public sector borrowers.
“Beside direct effects on the environment and savings that will be achieved by our entrepreneurs and the public sector, by the implementation of these instruments, we also expect other positive effects for the economy, such as, for example, more contracts for the execution of works related to these investments”, said Tamara Perko, President of the Management Board of HBOR and announced that the implementation of ELENA project worth more than EUR 2 million would start in autumn.
By these funds, external experts will be financed who will prepare project documents for investments in energy efficiency and renewable energy resources to eligible borrowers. The prepared project documents will be used for submitting applications for approval of funds under this financial instrument, but also for other credit lines that promote energy efficiency.
By signing this Finance Agreement, the Ministry of Regional Development and the EU Funds, as the Governing body of the Operational Programme “Competitiveness and Cohesion 2014 – 2020”, initiated the implementation of the tenth financial instrument, thus making available the total amount of HRK 4.2 billion, i.e. more than HRK 550 million, for the financing of their investment projects to Croatian entrepreneurs and to the public sector.